Call for new dawn for industrial relations

Graeme Watson, a former industrial lawyer for Freehills and adviser to Rio Tinto, called this week for a new age of peace and love in industrial relations. “I want to reorient the debate and provide a constructive path for considering the challenges of Australian enterprises in the current global environment," Watson, a vice-president of Fair Work Australia, said at a conference in NSW. “The conflict model is not the path for the future."

He went on: “In all workplaces, for the mutual benefit of employees and their employer, there needs to be productivity and business improvement and the collaborative involvement of the workforce in bringing that about."

Watson was a Howard government appointee and, with the Gillard government on the ropes and about to receive the outcome of a review of the Fair Work Act, anything he says will be viewed with scepticism in union quarters.

It echoes BHP chairman
Jac Nasser,
who last week complained that “an IR system that pits labour against capital can never lead in the long term to an efficient and productive workplace".

Yet Watson was seeking a way to defuse this sort of destructive confrontation. He made a concession to unionists by admitting that it was a “myth" that labour productivity was the only cause of the decline in productivity growth over the past 10 years.

He argued that the manner in which employees and employers relate to each other is actually key to the performance of an enterprise – and that when workers engage with the interests of a business, its performance will improve. An old-fashioned adversarial workplace, which pits employers against employees in industrial relations argy bargy, will generate the worst performance of any sort of business, he argued.

What was most intriguing about Watson’s speech were his proposals for resolving political impasse and turning the debate around to the common good of sharing the benefits of higher productivity.

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He said little about the content of Australia’s industrial laws on union rights of entry or awards and the like. Instead, much of the speech called for a change in the way that FWA operates, rather than the rules it administers. He said Australia should look at several countries that have over the past decade transformed their old industrial relations courts into something more like human relations consultancies.

Statutory bodies such as the Advisory, Conciliation and Arbitration Service in Britain talk to companies and workers well before matters reach a dispute.

They have training programs for unionists and employers, workplace projects to identify “shared goals" and problems, and mediation of small disputes.

Only if all these fail and a big dispute emerges will the ACAS turn into something more like Australia’s industrial relations courts with arbitration powers.

Watson says this is the path for Australia to follow. “We need a review of our institutions and a consideration of the roles they perform. In the UK, ACAS has a best practice advisory function.

“It issues publications and provides training for dealing with the modern workplace. It issues tips for better management."

Watson complains that, while employer and union submissions to the Fair Work Act review have focused on numerous provisions that either strengthen or weaken union bargaining power, none has looked at this model.

Yet the Business Council of Australia flirted with the idea in a paper in 2009 titled Embedded workplace collaboration: preventing disputes, in which it also recommended looking at the British model and similar bodies in the US, Ireland and Canada.

Indeed, the Labor Party talked about a non-adversarial model when it rewrote the Howard government’s Work Choices laws and transformed the old Industrial Relations Tribunal into Fair Work Australia.

Then Workplace Relations Minister
Julia Gillard
said in 2009 that, [FWA] “can be creative in how it assists employers and employees. It can tailor the means by which it assists parties to bargain for the first time or helps [them] to move on from an adversarial or destructive relationship."

But the BCA paper said that Gillard stopped short of giving FWA the power to deliver. The explanatory memorandum for FWA said the new body “will not have the same expansive dispute prevention capacity as ACAS" but “it will provide information and advice to employers and employees and it will have a greater capacity to mediate disputes than the Australian Industrial Relations Commission."

The BCA paper and Watson disagree slightly on the institutional framework for industrial relations agencies. The BCA suggested that the task of promoting co-operative workplaces should be split between FWA and the Fair Work Ombudsman, whose office already has some responsibility for education about workplace rules, as well as a remit for enforcing them. The BCA paper suggested that FWA, the arbitration body, would refer parties to the FWO, the consensus builder.

Watson says this approach will not work because companies and the agency are too scared of the FWO, which they primarily see as body that imposes fines. He says FWA should take on the role. Both agree, however, that the main problem is the training of the current crop of people in FWO and FWA, who are from adversarial industrial relations backgrounds rather than embodying broader mediation and consensus-building skills.

Watson risked complaints that he was reverting to type by complaining that FWA’s Sydney-based commissioners until recently almost all came from a union background.

But he was making a broader point that should also discourage overrepresentation of hardline union-busting lawyers in the new touchy feely FWA or FWO. “As professional workplace relations advisers, let’s sharpen our skills in the areas that contribute most to workplace productivity and fairness."

RMIT law professor Breen Creighton says it is hard to replicate the ACAS here because Britain’s industrial relations system is different and collective agreements are not legally enforceable.

Creighton says “interest-based" negotiation, where parties identify common interests and promote them, have had only limited success in Australia “as parties have been equivocal".

Russell Lansbury, emeritus professor of discipline of work and organisational studies at the University of Sydney, says countries such as Germany and Sweden have other systems of consensual industrial relations where workers even have board seats. But he says Australia lacks a culture of consensus to make this work.

“It’s difficult to separate out industrial relations from the rest of our political and legal systems," Lansbury says.

Melbourne University economics professor Jeff Borland argues that Watson’s focus on increased conflict is misleading because the level of industrial disputes is close to historical lows. “There are much more important problems even in labour markets than the level of disputes," Borland says.